Poll says many would struggle if mortgage payments rise

WATCH: A survey of homeowners found a third of homeowners with mortgages can’t afford even a small increase in interest rates. Reid Fiest reports on the fears of becoming house poor.

TORONTO – A survey by Manulife Bank of Canada says nearly half of Canadian homeowners are taking steps to whittle down their mortgage debt, but many would be in trouble if their monthly payments grew even slightly.

Manulife says 18 per cent of homeowners made extra lump-sum payments towards their mortgages in the past year, while 17 per cent increased their regular payments. Another five per cent of respondents did both.

In total, 40 per cent of the homeowners polled made extra mortgage payments during the past year, while 60 per cent did not.

The average amount of additional mortgage payments was $6,300. Manulife Bank of Canada’s president and CEO Rick Lunny said it’s encouraging that many homeowners are taking steps to reduce their mortgage debt.

However, the survey also found that more than a third of homeowners polled would face financial hardship if their mortgage payments increased by just 10 per cent.